Tirupur's Textile Units Ask Spinning Mills To Resume Cotton Supply

Textile units in Tirupur have asked spinning mills to supply cotton immediately, alleging that the latter stopped supplies without any reasons.

Raja M Shanmugham, president, Tirupur Exporters Association (TEA) said that the mills have stopped supplying cotton yarn and are not taking up the fresh orders.

“They have not given any reasons, despite the fact that prices have gone up by about Rs 50 a kg the past six months,” said Shanmugham, who has written to all the Textile Mills Associations, SIMA, TASMA and ITF to advise their members to supply the yarn continuously to protect the Tirupur Knitwear Exports sector.

Shanmugham said that the current decision of the mills would certainly impact garment units, largely affecting exports and stimulating job losses.

ALSO READ: Freight movement via rail to be raised 1.5 times: Draft National Rail Plan

He pointed out that due to non-commitment on delivery schedules, the foreign buyers will not only cancel the orders, but also will not be ready to place future orders with exporting units. He also noted that if the buyers leave the country, it will be very difficult to bring them back at a time when the domestic industry is in at a disadvantage on the competitiveness front, due to the absence of a level-playing field.

The strong domestic market is a permanent one and once the prevailing business ecosystem is disturbed, the future would be unpredictable, he said.

Tirupur Knitwear recorded business worth Rs 50,000 crore in the last financial year.

In his letter to the Association, Shanmugham said the rise in yarn prices the past two months followed the increase in cotton prices. Textile units have been purchasing the yarn despite incurring losses on already committed orders and it is only in future orders that they would be able to negotiate better garment prices from foreign buyers.

The garment sector is facing stiff competition in the global market and operating on wafer-thin margins and in such a crisis situation, stopping yarn supply will deal a body blow to the sector, he added.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor